BFAM - the entity acquiring Only About Children - is the largest...

BFAM - the entity acquiring Only About Children - is the largest childcare center operator in the world. they just spent $450mm to enter the Australian market, for the first time, calling it a 'beachhead position' on the conference call, multiple times.

BFAM paid $6mm/center, or ~15x EV/EBITDA. these are insane multiples. MFD, EVO, etc were acquiring Aussie centers in the $3-3.5mm/center range, and obviously the listed multiples of names like GEM, MFD, EVO are well, well under 10x EV/EBITDA.

in other words the mkt is realizing that 1) you have the largest childcare operator globally entering the aussie mkt with a roll-up strategy; 2) said operator needs to acquire lots more centers in market to defray the high price paid for entry; and 3) the rest of the (listed) space is very cheap in comparison.

I would expect EVO is either sold (the aussie biz or kiwi biz or both); and MFD (if the founders are willing), in the next 12-18mos, unless they rerate. BFAM cost of equity simply too cheap relatively and they have made their intentions clear.

i think if EVO was willing to sell its 24 Aussie centers, even at something like 9-10x EV/EBITDA pre-synergies, the stock would be nearly a double from here- even with hilariously low residual valuation assumptions on the Kiwi business.